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Walking Wounded – The Causal Welfare Loss of Underemployment through Overeducation

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  • Haisken-DeNew, John P.
  • Kleibrink, Jan

Abstract

Using data from the SOEP, we analyze the wellbeing impact of underemployment through overeducation to examine a broader definition of employment loss. Persons leaving a job through exogenous reasons but entering directly into immediate employment may not find a perfect employment match and cannot use their skills fully in the new job. We demonstrate that a 'downchange', although welfare reducing, may be more desirable than suffering the large welfare losses associated with unemployment whilst searching for a more suitable job match. Nonetheless, underemployed persons do not enter into the official job statistics, whilst their welfare loss due to 'downchange' is approximately 50% of the welfare loss of entry into unemployment.

Suggested Citation

  • Haisken-DeNew, John P. & Kleibrink, Jan, 2013. "Walking Wounded – The Causal Welfare Loss of Underemployment through Overeducation," Ruhr Economic Papers 423, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
  • Handle: RePEc:zbw:rwirep:423
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    References listed on IDEAS

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    Cited by:

    1. Jan Kleibrink, 2013. "Causal Effects of Educational Mismatch in the Labor Market," SOEPpapers on Multidisciplinary Panel Data Research 571, DIW Berlin, The German Socio-Economic Panel (SOEP).

    More about this item

    Keywords

    life satisfaction; skill mismatch; job change;

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion

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